It is relevant to know that prior to the contract for sale, the council had been using what became Lot 2 for extracting gravel paying the Hammonds a royalty. It was the parties' intention that for a foreseeable period, the council would continue to extract gravel from Lot 2.

After the contract for sale, and prior to completion, the Hammonds and the council entered into a deed which bears date 21 June 1971. By this deed, the defendant council covenanted:

"1. TO keep and maintain the fences on the boundaries

The council also covenanted that it would not dispose of Lot 2 except by way of mortgage without complying with the covenants and requiring any transferee to have imposed on it like covenants.

The plaintiff acquired Lot 1 on 16 March 1984. Its vendor was a company RLSH Pty Ltd which was controlled by Mr and Mrs Hammond, and to which Mr and Mrs Hammond had conveyed the land some years before. There had been no assignment of the covenants under the deed of 21 June 1971 when the Hammonds transferred to RLSH Pty Ltd. However, on or about 29 April 1984, the plaintiff took an assignment of the covenant. The notice of assignment was served on the defendant council about 21 December 1984.

The defendant council has ceased to extract gravel from the quarry according to the affidavit of the defendant's General Manager, Bruce Fitzpatrick. However, in his cross examination, Mr Fitzpatrick suggested that if it was expedient, the council might reconsider the use of the gravel pit again.

The plaintiff brings these proceedings to compel the council to comply with its covenants under the deed. The evidence of Mr and Mrs Behm, who control the plaintiff, is that whilst they concede they cannot actually see the gravel pit from their house, they object to its unsightly appearance and they give evidence, which I accept, that they would not have purchased the property had it not been for their belief that the council was obliged to "restore" the gravel pit at the end of its life or by December 1991, whichever first occurred.

The defendant council opposes the orders for specific performance and also seeks to rectify the deed. The principal defences are that -

(a) the rights under the deed had been abandoned by the Hammonds;

(c) that the court would not grant specific performance because it would not be able to superintend adequately the work that would need to be done;

(d) on its true construction the deed did not require the council to do anything more than to revegetate the pit;

(e) the deed, in any event, was void for uncertainty;

(f) that specific performance would impose hardship which would amount to injustice;

Then there are a series of issues arising out of the claim for rectification. These can be dealt with under the following heads:-

I will then under heading (k) draw the various threads together and consider the orders that should be made. Although there are some factors which would make it logical to deal with rectification first, on reflection it seems to me more appropriate to deal with the matters arising under the claim before passing to rectification. I will thus deal with the matters under those headings seriatim.

(a) Abandonment is a familiar concept in law but is one whose conceptual base is rather shaky. Greig and Davis Law of Contract (LBC Sydney 1987) state the principle as "Provided that the contract is still wholly executory ... , a contract will be regarded as terminated by abandonment if each party, by his conduct, had led the other to assume that their obligations are at an end. The court is not concerned with the subjective intention of each party, but with the way in which the conduct (or inaction) of each might reasonably be understood by the other." The position adopted by some of the English judges following the judgment of Lord Brightman in The Hannah Blumenthal [1983] 1 AC 854, 924, is not part of the law in Australia. That view would require one to prove an offer and acceptance in each case to be applied by silence.

When one is considering whether there has been abandonment, I think it is useful to look at the cases that were decided under s 89 of the Conveyancing Act where the question is whether an easement has been abandoned. The law is that one does not lightly infer abandonment of a proprietory right (or even a contractual right) but looks to see whether the persons who possess the right have made it clear that neither they nor their successors will make any use of the right; see for instance Grill v Hockey (1991) 5 BPR 11421.

Again, where one party has wholly or partly performed the contract it is much more difficult to come to the view that there has been an abandonment than is the case in a completely executory contract.

There must be more than mere delay in order to constitute abandonment: Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420. Ordinarily, one looks to see circumstances constituting a release of a right.

In the instant case, the evidence goes no higher than that the Hammonds transferred the property to their family company without taking an assignment and that the Hammonds had taken no action prior to 1976 to see that there had been restoration to the northern and eastern side of the existing gravel pit as required by clause 4. It may be that some officers of the council took the view that because there had been no such action, that they may escape from their liability under the deed, but it seems to me that is not enough to establish that on the balance of probabilities there had been an abandonment.

Accordingly, I do not find that there was any abandonment by the plaintiff or its predecessor in title of the rights conferred by the deed.

Ordinarily, equity courts do not consider that damages are an adequate remedy where one side has completely performed the contract. A vivid illustration is Greene v West Cheshire Railway Co (1871) LR 13 Eq 44. In that case, there was an agreement between the plaintiff and the defendant railway company that if the plaintiff withdrew his objection to the bill to authorize the defendant's railway, the defendant would construct and forever maintain at its expense, a sufficient siding on the plaintiff's land for the use of the plaintiff. The plaintiff fulfilled his half of the bargain by withdrawing his opposition, but the defendant did not install the siding. Bacon, VC, at p 51, in response to the submission that damages were an adequate remedy said, "If that were the law, the great majority of the cases in which this court has exercised its authority for the purpose of compelling specific performance of contracts might be readily disposed of, because in the great majority of cases a payment in money might satisfy the wrong which the breach of such contracts inflicts. But it would be a total departure from all principles by which the administration of this branch of the law has hitherto been guided, to hold that it is at the option of a man who has persuaded another to part with his rights upon a specific condition to say: `I can, but I will not, perform the obligation I have entered into; and instead of keeping faith, and honestly fulfilling my promise, I will leave you to take the chances of an action for damages ... and, instead of acknowledging your just rights, will compel you to receive, instead of them, such a sum as I may be able to persuade a jury will compensate you for the loss and injury and disappointment which my wilful wrongdoing may have occasioned to you.'"

The statement in Greene's case should not be taken to lay down any inflexible rule. Indeed, Greene's case is not even mentioned in some of the leading books on equitable remedies. In any event, as Dr Spry points out in the 4th edition of his Equitable Remedies (LBC Sydney 1990 p 111), the true view is that equity takes into account the fact that one side has already received all that he or she was to get under the contract when deciding whether it should in its discretion grant specific performance.

I did find it rather strange that this defence of damages being an adequate remedy was raised in the light of the evidence that the council just does not have sufficient assets, nor can it raise sufficient extra rate revenue to pay any damages which the plaintiff might have assessed against the council. The defence that damages are an adequate remedy once upon a time may have operated to defeat equity, but nowadays, the jurisdiction of the court to deal with the proceedings is unaffected and the court merely grants the appropriate remedy either specific performance or damages. As this is a completed contract the bias is in favour of specific performance all other things being equal.

A further objection is made that the damages are really close to nil because the gravel pit does not affect the enjoyment of the plaintiff or its controllers in any real sense at all. The evidence is that the pit cannot be seen from the plaintiff's house and that if Mr and Mrs Behm drive from the house to the main road then they will pass the pit, but as it is below ground level and there is vegetation near, they would not have much of a visual pollution shock at all.

It does not seem to me that this matters at all. If a person makes a contract or has the benefit of a contract for a certain service to be performed, it does not matter whether in the eyes of the ordinary objective juror, the service has no value. So in Blount's Fragmenta Antiquitatis 2nd ed 1784 p 50, Rowland le Sarcere held his land in Suffolk by grant serjeanty for which on Christmas Day every year before the King he had to at one and the same time dance, puff up his cheeks making therewith a sound and let a crack. This doubtless entertained royalty in less genteel times, but had instead of there being a tenure there had been a contract to perform this service, it could not be said of the person in Rowland's position that the exercise was of no value, therefore if he did not perform the service he did not have to pay damages.

Perhaps a more modern example is if some man with a fetish pays $100 to a woman to drink champagne out of her shoe. It is no defence if sued for damages for non-performance of the service that the ordinary person in the street would get no value at all from drinking champagne out of a used shoe. The measure of damages in each case is the cost of obtaining someone to provide a substitute service: National Coal Board v Galley [1958] 1 WLR 16.

Another illustration of the proposition that it does not matter that the services to be provided have little pecuniary value in the eyes of an ordinary objective beholder is provided by Disen v Samson [1971] SLT 49, where a bride employed a photographer to take photographs at her wedding and recovered damages including non-pecuniary benefits. I am not aware of the pulchritude or otherwise of the bride in question, but in any event she would still have had pleasure in looking at the photographs of her wedding day and would be entitled to damages for non-performance of the service.

However, the fact that the quantum of damages is not instantly obvious does go a little the other way. Where there is extreme difficulty about the assessment of damages, equity tends to give specific performance. I analysed the position recently in Borg v Howlett - 24 May 1996. I there rejected the statement of the rule in England espoused by Jones and Goodhart on Specific Performance (Butterworths London 1986) at p 114 that equity requires it to be impossible to prove loss before specific performance will be granted and accepted instead Dr Spry's proposition at p 62 that it is merely one of the factors that equity takes into consideration when considering whether, as a matter of discretion, it should grant the equitable remedy or damages. In my view the difficulty of assessment of damages in the instant case tends towards giving an equitable remedy rather than against it.

(c) There is a general proposition that the court does not enforce contracts which require it to superintend the performance of the contract. Again, this proposition in that form is too widely stated and even last century in railway cases the court took the view that if a person took the benefit of a contract and then refused to perform it, it could not hide behind the difficulty of superintendence. As James VC said in Wilson v Furness Railway Co (1869) 9 LR Eq 28, 33, "Rather than allow such a gross piece of dishonesty to go unredressed the Court would struggle with any amount of difficulties in order to perform the agreement."

I do not for a moment suggest that there is any gross dishonesty in the instant case, but merely point out that the general principle which is relied on by the defendant is nowhere as strong as its counsel has submitted; see also Price v Strange [1978] Ch 337. Again, as Dr Spry says, the difficulties of superintendence will be one of the factors that will go into the mix when the court is considering whether or not it is appropriate in the interests of justice to grant specific performance. In more recent days, the courts have had less difficulty with superintendence than previously. It is not at all uncommon for a general order to be made with liberty to apply to a Master for directions as to the implementation of the order should difficulties arise, or alternatively, for an order to be made in general terms with the order not being entered for six months so that the parties can come back and agitate any particular problem that may have prevented carrying out the spirit of the court's order in those six months with a costs penalty being charged against any party who is not complying with the spirit of the order.

(d) and (e) I now turn to questions of construction of the deed. The two matters I outlined as (d) and (e) above can be dealt with together because if there is no sensible construction of the deed then the court may be in a position where it will have to hold the deed void for uncertainty. In considering that matter, of course, I take into account that this was a transaction between people at arm's length; it was in many respects a commercial transaction.

One must apply the well-known passage from the judgment of Barwick, CJ in Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429, 437, that the court is not to adopt any narrow or pedantic approach to such contracts but is to use its skills to ascertain the contractual intention and will only be defeated if the contract is so obscure and so incapable of definite or precise meaning that the court is unable to do that exercise. However, as Hope, JA said in Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130, 143, "There are of course limitations. I have already referred to the case where the promisor has a discretion, not only as to what he shall do, but also as to whether he shall do anything. Such a promise is illusory. Furthermore it appears that the promise will not be enforceable if the manner of performance, including the amount of money to be paid, or, if relevant, the number of shares to be offered, is a matter entirely in the discretion of the promisor and no criteria by which the performance required by the promisor can be measured, or the minimum of that performance can be measured, is expressed or can be found to be implied." His Honour then gave as an illustration Kofi-Sunkersette OBU v A Strauss & Co Ltd [1951] AC 243.

It must be remembered that before 1971, the defendant council had already used Lot 2 for the purpose of extracting gravel. Accordingly, as at the date of the deed, the land was no longer in its natural condition. It further needs to be remembered that the council has since 1971 been the registered proprietor of the land on which the gravel pit was conducted. Thus, this is not to be dealt with as a case where someone has defaced someone else's land.

The first problem is that there is no longer any "Department of Soil Conservation of New South Wales". This did exist at the time the deed was made, but, under successive government reorganizations came to be a part of the Department of Conservation and Land Management, known as CALM.

According to Mr Rogers, an officer of the relevant Department, "After the last State Election CALM came under a mega department which was called the Department of Land and Water Conservation." Mr Rogers' evidence was that the Department of Land and Water Conservation was the "closest continuing government department dealing with the area". Although it was argued that because the Department of Soil Conservation had ceased to exist there could be no strict compliance with the final part of clause 4, in my view the parties meant the Department of Soil Conservation or such other government department as was the successor to the Department of Soil Conservation. At present that is the Department of Land & Water Conservation.

However, the more difficult word in the clause is "restore". Does this word mean putting the land back into the same condition as it was before gravel was extracted? or does it mean putting the land back into the same state as it was as at the date of the deed? or does it merely mean laying at least 4 inches of topsoil and grass so that the area is regrassed, but it is not brought up to the same surface level as it had before any gravel was abstracted. This is an important question because to supply fill to replace the gravel that was taken out over perhaps a 20 year period would be extremely costly.

The only close authority to the present case is R v Birmingham & Gloucester Railway Co [1841] EngR 828; (1841) 2 QB 47; 114 ER 21. In that case, the relevant Railway Act provided that where it was necessary to cut through a road in order to construct the railway, the defendant should make a substitute road and then when the works were finished restore the road. The point at issue was whether, if only part of the road was taken, the end result had to be a track as wide as formerly. The Queen's Bench decided that the word had that connotation. However there is little discussion of semantics.

There are some American cases on similar problems. These include Chicago Milwaukee & St Paul Railway Co v City of Milwaukee 72 NW 1118 (1897) (Wis); Sanitary District of Chicago v Chicago & Alton Railroad Co 108 NE 312 (1915) (Ill), but neither is of any assistance to the present problem except that they again indicate that one must restore the road to as good a way as it was before the railway was put in. There is also United States of America v Outer Harbor Dock & Wharf Co 124 F Supp 337 (1954) (USDC), where at 345 the court adopted a dictionary definition that "Restoration" is "a bringing back to a former, original, normal or unimpaired condition". The only other American case that I believe needs to be considered is Hempstead v City of New York 65 NYS 14 (1900) (NY Supreme Court Appellate Division). In that case the statute required a local government authority which diverted a stream to restore the navigable stream. Goodrich, PJ, giving the judgment of the court said at 17, "Here we are called to construe the word `restore' which etymologically signifies `to bring back to a former and better state'; `to bring back or put back to a former position or condition'. .... This would seem to require proof either that such former or better condition ever existed, or that it existed at the time of the passage of the act."

The second meaning of "restore" in the Macquarie Dictionary is "to bring back to a former, original, or normal condition, as a building, statue, or painting". Meaning 3 in the Shorter Oxford Dictionary is "to build up again; to re-erect or reconstruct. Now specifically, to repair and alter (a building) so as to bring it as nearly as possible to its original form ... to bring back to the original state; to improve repair or retouch (a thing) so as to bring it back to its original condition." Whenever one is speaking of "restore" one must endeavour to ascertain what it is that one is restoring. In some cases a building may be "restored" so that it looks like the original building even though the materials used are modern materials. What one is really doing in such a case is restoring the building aesthetically. In other situations one may restore a steam locomotive to operating condition, but may have to make modifications to the engine in order to comply with modern safety standards. One is restoring its essence but it may look slightly different to what it did before. Normally when one is restoring a building or a railway engine or the like one would use the same material as the original but this would not necessarily be so. There would, however, be a distinction in most peoples' minds between for instance, restoring an old car and building a replica of a car. With restoration, the original material is expected to be used in the restored article. However, this is flexible and it still would be a restoration of tramcar No 244 if original parts from scrapped car 245 of the same series was incorporated in the restoration of 244.

I should note for completeness that there have been some cases where courts have analysed the word "restore" in industrial law in the sense of restoring conditions. One such is Re Broken Hill Proprietary Co Ltd [1971] AR (NSW) 338, a decision of Sheppard, J when a member of the NSW Industrial Commission. The flavour of these cases appears to be that one can restore an employee's conditions by compensating the employee for lost bonuses etc by some other form of remuneration.

With these thoughts in mind, I now revert to consideration of the wording of the deed. As I said earlier, there are three possible meanings of the word "restore", (a) that the land had to be put back into the same condition as it was before the gravel was abstracted; (b) that it had to be put back into the same condition as it was at the date of the deed; or (c) that it has to be restored to being pasture land by being covered by at least 4 inches of soil and regrassed.

It would seem to me to be fairly obvious that what the parties wanted was aesthetic restoration. There could be no argument that the parties wanted gravel put back in the land so that the constitution of the soil was the same as it was before the gravel had been removed. The parties either wanted the land to be filled with non-toxic fill and then have 4 inches of top soil and be regrassed so that it reached a particular level, or alternatively, merely have top soil put on the surface at he end of the excavation of gravel and regrassed.

Meaning (b) is semantically more acceptable than the other meanings, but it is rather hard to impute to the contracting parties the idea that they would want to have the gravel pit at the level that it did possess as at the date of the deed. Indeed, this is also inconsistent with the notion that the eastern and northern side of the existing gravel pit would be restored. This seems to suggest that the restoration was to go back to some earlier point of time.

Accordingly, it seems to me that the only debate can be between meaning (a) and meaning (c).

After much consideration it seems to me that (a) must be accepted. I say this for a number of reasons. First, the opening words of clause 4 of the deed are "To restore and regrass the land". If the word "restore" merely meant to restore the land to its state as pasture, then the words "and regrass" would be otiose. Secondly, the restoration is to the state in which the land was before any gravel was extracted. "State" connotes condition, constitution and structure. It is the condition, constitution or structure of the land that must be restored, not just the surface. Furthermore, the reference to restoration of the eastern and northern side at an earlier date is to suggest that one is not to take into account the final levels of the gravel pit, but rather the level that existed as at the commencement of the excavation. Fourthly, the specific reference to the replacement of at least 4 inches of top soil (note the word "replacement" rather than "restoration") when added to the word "regrass" used at the beginning of the clause, indicates that restoration is something more than reinstatement of the surface.

Mr Downes QC for the defendant, submitted that "state" in the covenant in clause 4 meant "appearance" and not "condition". Although I have not been able to find any comparable case in the various dictionaries of legal words and phrases, I do not consider that this is the meaning of the word "state" in the covenant in clause 4 of the deed in the context in which the word appears. Mr Downes QC also submitted that the words "before the gravel was extracted" did not mean "before any gravel was extracted". Again I have discarded this submission which is really situation (b) referred to above because of the context. Mr Downes QC says that if one takes this view one does not sufficiently bear in mind that there was a substantial gravel pit on the site before the deed was sealed. I have taken that into account but do not consider that it outweighs the other factors involved.

Accordingly, on the proper construction of clause 4 of the deed the obligation of the council is to fill the gravel pit so that the land will be brought up to the level before gravel was extracted the 4 inches of top soil being replaced under the guidance of the relevant government department and grass laid on the top of that topsoil.

(f) The defence of hardship these days very rarely meets with much success. In order to give the defendant the benefit of a defence of hardship there must normally be some unconscionable bargain or some compassionate grounds such as an elderly person in a moment of weakness yielding to pressure to sell her home to a developer which developer in any event was only using the house as part of his trading stock: Madden v Kevereski (1982) 2 BPR 9645. Normally hardship is to be judged at the time the contract is made and subsequent events are immaterial: Bosaid v Andry [1963] VicRp 67; [1963] VR 465, 478-9, though see Spry, Equitable Remedies 4th ed (LBC 1990) p 193. Such propositions are stated in general terms and there would be no difficulty at all in showing that there are some cases which do not fit into the general statements I have made. For instance, in Cominos v Rekes (1979) 2 BPR 9619, 9623, Waddell, J upheld a defence of hardship in a case which does not come within the principles I have noted. In all cases, the matter is one for the judge to assess in the light of all the other facts of the case. The mere fact that a party will suffer financial hardship is seldom enough.

However, here the allegation is that an extremely large sum of money will have to be expended by the council in carrying out the deed and that this will cause hardship to the ratepayers of the Oberon Shire generally, yet if the work is done there will be virtually no pecuniary benefit and indeed, on the defendant's case, hardly any non-pecuniary benefit to the plaintiff.

The matter is always, as Dr Spry says at pp 193 and following, a matter of degree, though the defence does not succeed unless specific performance should be considered by the court to be highly unreasonable: Wedgwood v Adams [1843] EngR 1147; (1843) 6 Beav 600, 605; [1843] EngR 1147; 49 ER 958, 960.

One in this connection looks at the hardship in granting equitable relief as opposed to common law damages, not the hardship in the decision to enforce the contract: Spry p 196. Thus, historically the strongest cases were where a person had made a contract do so something which was of no value to the other party such as restoring buildings to their condition at the start of a long lease when it was commercially apparent that this would be a waste of money; see for instance Ely (Dean) v Stewart [1740] EngR 146; (1740) 2 Atk 44; 26 ER 423. It does not seem to me that the present case is in that category. It is true that it is difficult to assess the real damage to the plaintiff through non-compliance with the covenant, but the plaintiff at least considers that it is important to it that the work be done either by the defendant, or alternatively by damages secured from the defendant so that the plaintiff itself can do the work.

There is material filed on behalf of the council to show that if, as I have held, the council is liable to restore the site in the sense of refilling it with earthen material and covering it with topsoil, the cost will be horrendous. Mr Fitzpatrick, the defendant's General Manager, swears that the council in 1996/97 quoted a sum of only $79,250 for non-recurrent spending of which there is only some $10,000 uncommitted.

Mr Robins, the Council Engineer, swears that approximately 110,000 cubic metres of gravel was removed from the gravel pit and that restoration of the gravel pit in the sense which I have used the term would require resumption of about one and a half hectares of the plaintiff's adjoining land and bull-dozing the adjoining land to fill up the gravel pit, and that would still leave a depression of half the present level of the pit. That would cost something like $300,000. Alternatively, fill could be obtained from elsewhere and by delivery in 14,310 cubic metre truck loads, could be placed on the site, the cost for transport and fill being $360,000. This would take five to ten trucks six to eight months to complete the task. The council only has available four tipper trucks throughout its whole region so that it would need to employ subcontractors to do the job.

This material is put forward in an endeavour to show that making a decree of specific performance would impose great hardship on the council. It was also put by Mr Downes QC that the corresponding benefits to the plaintiff would be slight. The site of the gravel pit cannot be seen from the plaintiff's home, nor can it readily be seen from the access road. The fee simple in the gravel pit is vested in the council so that no use can be made of the land by Mr Behm or his associates: the only advantage they would obtain if this vast amount of money was expended would be to have level land if they ventured off the road to have a look at it.

Along with hardship, the court must take into consideration the fact that the defendant is a public authority: Aristoc Industries Pty Ltd v RA Wenham (Builders) Pty Ltd [1965] NSWR 581, 590 and see Kerr on Injunctions 6th ed (Sweet & Maxwell London 1927) p 33 and cases there cited.

In Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418, 438-9, Latham, CJ, Williams and Fullagar, JJ said, "Specific performance is not a remedy which should lightly be refused when the plaintiff has established the existence of a contract capable of specific performance which the defendant has refused to complete." The Justices then quoted from the judgment of Isaacs and Rich, JJ in Fullers' Theatres Ltd v Musgrove [1923] HCA 12; (1923) 31 CLR 524, 549, to support that proposition and continued "It would be necessary for the defendant to prove that a hardship amounting to an injustice would be inflicted on him by holding him to his bargain and that it would not be reasonable to do so."

Ordinarily, financial difficulty will not amount to a defence of hardship: Pasedina (Holdings) Pty Ltd v Khouri (1977) 1 BPR 9460, 9461. There must be something more. See also Patel v Ali [1984] Ch 283, 288. That something more would appear to be circumstances which mean that there would be imposed on the defendant a hardship amounting to injustice. Such circumstances may be constituted by, for instance, the circumstances in Webb v Direct London & Portsmouth Railway Co [1852] EngR 391; (1852) 1 De GM & G 521; 42 ER 654, where a railway company had entered into a contract to buy 8 acres of the plaintiff's land and then had abandoned its project. Requiring the company to now take the 8 acres when the plaintiff could just as easily get damages for the loss of his contract would amount to such a hardship as would incline the court not to order specific performance.

The extra factor may be found in the fact that whilst it will cost a large sum of money for the defendant to comply with the contract, the plaintiff will in fact gain very little benefit. An illustration is where a lessee has to restore buildings to the condition that they had at the commencement of the long lease yet it is quite plain that the landlord is only going to demolish the buildings or sell the land for its vacant land value in any event; cf City of London v Nash (1747) 3 Atk 512; 517; [1747] EngR 110; 26 ER 1095, 1098.

The instant case seems to get close to this category because the plaintiff has suffered very little pecuniary damage, but the cost to the defendant in fulfilling the contract is extremely high.

However, the plaintiff says that this is really a reason why specific performance should be ordered, because if left to a remedy at law, the plaintiff would not have an adequate remedy. Remembering that the land used for the gravel pit belongs to the defendant and not the plaintiff, the plaintiff might only get nominal damages because no substantial damages would flow from the loss of aspect in the current circumstances; cf Surrey County Council v Bredero Homes Ltd [1993] EWCA Civ 7; [1993] 1 WLR 1361.

If I refuse specific performance, damages would be payable under Lord Cairns' Act now incorporated as s 68 of the Supreme Court Act 1970. Hardship is no defence to a claim for damages under Lord Cairns' Act or at common law: Bosaid v Andry [1963] VicRp 67; [1963] VR 465, 479. Under that Act ordinarily the damages if the defendant has committed a breach of contract at common law, as it has done here, would be the same amount as would be awarded at common law had an action for damages been mounted in that Division. There are two reasons for this. First, before the amendments to Chancery procedure in the 1850s, what would happen would be that Equity would dismiss the proceedings for specific performance on discretionary grounds and note that that dismissal was without prejudice to the plaintiff bringing proceedings at law. The plaintiff would then bring proceedings at law and obtain common law damages from a jury. The other reason that is now given is that under Lord Cairns' Act, the damages must "constitute a true substitute for specific performance": Wroth v Tyler [1974] Ch 30, 58.

Ordinarily it would appear that those damages will be the same as at common law, but it is arguable that in special situations the court should apply the more liberal rule worked out in restrictive covenant cases such as Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798. It would see from McDermott on Equitable Damages (Butterworths Sydney 1994) p 121, that this is often 5% of the profits that a developer would have made had it not been burdened by a restrictive covenant. However, in some cases up to 50% of the profit has been allowed; see SJC Construction Co Ltd v Sutton LBC (1975) 29 P & CR 322.

I do not go any further than merely mention this line of authority. I do this for a series of reasons. First, the matter of quantum of damages was not argued before me and needs to be thoroughly considered. Secondly, it may be that upon publication of this judgment the parties can agree on what would be a suitable amount to release the council's obligation to have to perform the contract, and thirdly, it may well be after considering all the authorities that the court should not make such an order in a case where it is giving damages in lieu of specific performance as opposed to damages in lieu of an injunction to protect a restrictive covenant.

There is a further reason why that matter should not be opened up at this stage. Prima facie the plaintiff's right on the facts as I have found them is for a decree to be made for specific performance. Although on the facts presented to date there would appear to be some hardship on the council, it does not take much lateral thinking to realize that there are other ways of restoring the gravel pit without having to spend many many months trucking in fill. Other possibilities would be to use the pit as a garbage dump, or to put a concrete platform over the void sealing it off. In each case 4 inches of topsoil and grass could be laid on top. There may also, by negotiation, be other possible solutions, such as turning the pit into a large dam or an ornamental lake or so landscaping it without complete fill that the aesthetic appearance is acceptable to the plaintiff.

It seems to me in the circumstances that the proper thing is to make a declaration of the existence of the contract and order that it be specifically performed, referring it to a Master to implement the decree for specific performance. I will also refer to the Master the question as to whether, in the light of subsequent material which appears in the inquiry, the decree for specific performance should be rescinded and an order for damages made. This from time to time happens in specific performance suits, see for instance McKenna v Richey [1950] VicLawRp 64; [1950] VLR 360.

I will thus publish these reasons and stand the matter over for short minutes to be prepared to reflect these matters.

(g) Accordingly it is necessary to pass to the question of rectification. Mr Downes QC put that the proper evaluation of the evidence is that Mr Hammond's intention was to execute a deed in the original form, that is, the form annexed to the contract of sale of Lot 2 to the council. He says that the council's intention as to what it was executing was the same as can be seen from the council documents at the time. The council was not aware, he says, that the documentation of the transaction had altered.

Mr Downes QC put that Mr Hammond had twice sworn that this was so.

In the transcript at T28, Mr Hammond is recorded as saying to Mr Downes QC in cross examination that the agreement with the council began on the basis that there would be a 20 year limitation on the working of the gravel pit and then Mr Hammond agreed that it was probably correct that the council wanted to add the words "or upon completion of gravel winning operations, whichever is the greater time". He was then shown his affidavit of 18 March 1996 (PA10), to which was annexed Mr Hammond's solicitor's letter to him which informed him that Oberon Council had asked for an alteration to the contract that after 20 years the words "or upon completion of gravel winning operations whichever is the greater time" should be added. Mr Downes QC had Mr Hammond agree with him that that letter did say "whichever is the greater time". Mr Downes QC then asked:

In re-examination, Mr Dougall QC for the plaintiff, said, picking up the words "at that stage":

A. "Well, when I got to - when the date of completion came

could postpone it forever if they felt so disposed,

A. "Well, as far as I remember I pointed it out to him

Because of the nature of this evidence and because Mr Downes QC had objected to the evidence being given in re-examination on the ground that it did not arise out of cross examination (which contention I rejected), I asked Mr Downes QC whether he would like to cross examine further but he did not take up that offer.

Mr Hammond's solicitors, Messrs McIntosh, McPhillamy & Co, are still practising in Bathurst. Their file was made available to the plaintiff and letters from that file appeared as annexures to the affidavit, but there is no-one in the firm at the present who remembers this transaction at all. The council's solicitors, who were Messrs VF Gordon, John Wilson & Co are no longer practising.

There was produced from McIntosh McPhillamy's file, a copy letter of 8 March 1971 to the council's solicitors. This refers to those solicitors' letter of 5 March 1971 which noted that the purchaser was to enter into a covenant and requested "advice by return mail if the Vendors require any covenants in the memorandum of transfer and if so we would be pleased if you would forward us for approval form of covenants as required by the Vendors."

McIntosh McPhillamy & Co replied on 8 March 1971 requesting that covenants be included in the memorandum of transfer as listed in this letter, No 4 of which is in the same terms as the deed that was actually executed, that is, the last three lines before the proviso read "Restoration will be completed on the 31st December, 1991 upon the Transferee ceasing to use the said Lot 2 for a purpose of winning gravel whichever date should occur the sooner." The council's solicitors replied that they considered the Registrar General would not register a transfer containing covenants that were positive in form and suggested that there be a separate deed of covenant. There was no comment by the council's solicitors as to the form of the covenants. There was then correspondence in which it was suggested, and the council later agreed, to add a further covenant that the council would not dispose of the land before complying with the covenants.

Various officers of the council gave evidence. Bruce Fitzpatrick the current General Manager of the council, said in his affidavit DA18, that the minutes of a special meeting of the council held on 21 December 1970 contained the following:-

"127. Acquisition of Gravel Pit from RH & SL Hammond

There was no evidence as to the circumstances under which the council's seal was affixed to the deed on 21 June 1971 save that the document itself recites that that was "in pursuance of a resolution passed at a meeting on the 21st day of June 1971" and the seal is attested by the then President and the then Shire Clerk.

Mr Downes QC puts that the case is clearly one of mutual mistake or unilateral mistake. By "mutual mistake" he means that both the council and Mr Hammond thought that the deed which they were sealing was in accordance with the special condition of the contract. The only alteration from their original purpose was that because of the attitude of the Registrar General, the covenants had to be in a deed rather than in the transfer.

Mr Downes QC, in short, asked for rectification by deleting the word "sooner" and substituting "later". The actual rectification is a little more detailed than this, but this is the gist of it.

The evidence is that the council ceased work on the gravel pit some years ago. However, the evidence made it fairly clear to me that should there be rectification, the council may very well restart work on the gravel pit so as to postpone for as long as possible the heavy financial obligations that would be cast upon it if either there was specific performance of the deed or else damages were awarded in lieu.

Mr Downes QC led me through the authorities dealing with rectification in this sort of case. He commenced with Meagher Gummow and Lehane Equity Doctrines and Remedies 3rd ed [2615], and then progressed through A Roberts & Co Ltd v Leicestershire CC [1961] Ch 555; Johnstone v Commerce Consolidated Pty Ltd [1976] VicRp 46; [1976] VR 463 and Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd [1980] EWCA Civ 3; [1981] 1 WLR 505. The reason for this excursus was to concentrate upon the following words of Pennycuick, J in the Roberts' case at p 570, that there is a "principle that a party is entitled to rectification of a contract upon proof that he believed a particular term to be included in the contract, and that the other party concluded the contract with the omission of a variation of that term in the knowledge that the first party believed the term to be included."

That passage has been approved on many occasions since it was uttered including the two cases which I have listed. The problem for the council in the instant case is to conclude that there is strong irrefragable evidence that the council believed that the term including the word "sooner" was to be included in the deed. I will return to this.

Mr Downes QC then took me through some of the standard cases on rectification in Australia including Coolibah Pastoral Co v The Commonwealth (1967) 11 FLR 173. Mr Downes QC submitted that in the appropriate case successors in title are bound by a claim for rectification, especially of the type referred to in Roberts' case and he referred to Garrard v Frankel [1862] EngR 371; (1862) 30 Beav 445; 54 ER 961; Smith v Jones [1954] 2 All ER 823, 827.

I should deal first with the question of whether the evidence supports the scenario referred to in Roberts' case as submitted by Mr Downes QC, and secondly, the effect of rectification on the present plaintiff who is a successor in title to Mr and Mrs Hammond. I will do so on the basis that for the reasons set out in section (h) the deed does not deal with an interest in land.

I just do not think the council has established its case for rectification on the facts. Councils do keep records of their activities for a considerable period and one expects that when the question is whether the council made a mistake in executing a document in 1971 there would be some records bearing on the question. The only material which has been put forward is to show that the contract between the Hammonds and the council of February 1971 was subject to a condition which contained the words which the council now wishes to have inserted in the deed of June 1971. There is very little material to show how the change from "20 years or the closing of the gravel pit whichever was the greater" became "20 years or the closing of the gravel pit whichever was the sooner". However, the council's explanation for the change was not the only possible version. One is the version put up by Mr Hammond in re-examination. Although councils can err as much as any other person or body politic, it is very strange that with the bureaucracy that attends most councils the error, if it be an error, was not noticed (a) by the council's solicitor; (b) by the council officer dealing with the matter; (c) by the appropriate committee which usually is involved in recommending sealing of documents to the council; or (d) by the councillors themselves. When one adds to this the fact that there was correspondence between the solicitors as to the exact terms of the deed and there were negotiations on some of the terms and that the solicitors seemed to have got the council's instructions to agree to the terms of the deed, it is more unlikely that a mistake was made. Of course, it may be that the word "sooner" was inserted by McIntosh McPhillamy & Co and escaped everybody's notice, but I think that is really a matter of speculation.

Although the modern law has probably held back a little from the old test that rectification must be established by "strong irrefragable evidence" (Countess of Shelburne v Earl of Inchiquin [1784] EngR 38; (1784) 1 Bro CC 338, 341; [1784] EngR 38; 28 ER 1166, 1168), modern cases still require convincing proof: Joscelyne v Nissen [1970] 2 QB 86, 98.

I do not find convincing proof in the material submitted by the cross claimant or on the evidence as a whole.

As Brightman, LJ said in Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd supra at 521, "It is not, I think, the standard of proof which is high, so differing from the normal civil standard, but the evidential requirement needed to counteract the inherent probability that the written instrument truly represents the parties' intention because it is a document signed by the parties." In the instant case the degree of comfortable satisfaction that I need to counteract the inherent probability that an instrument sealed by a council after advice from its solicitors and officers did not represent the intention of the council has not been established.

Equity is reluctant to grant rectification where the rights of third parties may be affected: Bateman v Boynton (1866) LR 1 Ch App 359, 367; Coolibah Pastoral Co v The Commonwealth supra at 190. However, as has been seen, the principle adopted in A Roberts & Co Ltd v Leicestershire CC supra indicates that with the type of estoppel/rectification dealt with in that case upon which Mr Downes QC relies, rectification is available not only against the person who brought about the mistaken instrument, but also against those claiming under him. The principle in Roberts' case was derived from Snell's Equity. In the 29th ed the relevant passage appears at pp 630-631. That passage seems to have flowed from Whiteley v Delaney [1914] AC 132, 143.

To take this passage as inflating an equity of rectification beyond a mere equity to an equitable interest and to have such equitable interest prevail notwithstanding conveyance to a bona fide purchaser for value without notice, it is clearly taking it too far. What are the limits of the passage have never been spelt out. Subsequent judges have just followed Snell's summary without examination of the concept.

The Whiteley case itself was one where the facts were out of the ordinary. It does not seem to me that the learned law lords who dealt with the proposition intended to interfere with the doctrine of bona fide purchaser for value without notice. They were more concerned with a fraudster's mortgagee taking an unintended benefit.

The problem does not actually arise in the instant case in view of my finding of fact. However, my view would be that Mr Behm and his company had no notice of any problem with Mr Hammond's deed when they took their conveyance. The mere fact that there had been no restoration in 1976 does not seem to me to amount to notice of any problem that might give rise to an equity of rectification. Accordingly, had there been any proper claim for rectification, in my view it would not have prevailed against the plaintiff's interest.

I should point out, lest it be thought I have overlooked it, that there is some authority for the proposition that in any event one does not rectify a document which is under seal of a council. I believe that that notion was exploded in Shipley UDC v Bradford Corp [1936] Ch 375, 398.

(h) Neither side argued that there was an interest in land involved in the instant case. This was a proper concession; see eg Stocks & Holdings (Imperial Arcade) Ltd v Fink (1965) 82 WN (Pt 1) (NSW) 386.

(i) Another possible problem was whether the modern rule against perpetuities would vitiate the contract if it were rectified in the way in which the council submitted it should be rectified. If the modern rule against perpetuities applied to the contract and the council's contention were correct, one would actually have a case where the classic example of the "magic gravel pits" scenario would have been presented. The term "magic gravel pits" was coined by WB Leach in his article "Perpetuities: Staying the Slaughter of the Innocents" in (1942) 38 LQR 35, 45, where he discussed Re Wood [1894] 2 Ch 310 and on appeal [1894] 3 Ch 381. See also Sappideen & Butt, Perpetuities Act (LBC 1986) p 63. If one has a limitation which is to take effect at the exhaustion of some gravel pits, then because there is no certainty that the pits will be worked out within the perpetuity period, the limitation is void. However, the modern rule against perpetuities does not apply to contracts or covenants which do not create interest in land or other property, see eg Walsh v Secretary of State for India [1863] EngR 562; (1863) 10 HLC 367; 11 ER 1068 and Sappideen & Butt at p 8.

It seems to me that because I have held that rectification must fail it is not necessary to look at other defences such as laches except to record that they were raised.

(k) It follows that I will make orders on the claim as set out in section (f) above. The cross claim must be dismissed. Counsel for the plaintiff should bring in short minutes containing the appropriate orders. The short minutes should also include an order that the defendant pay the costs of the proceedings to date reserving further costs.

I will list the matter on 5 September at 9.30 am for this purpose. I should note that my last sitting day this year will be 6 September so that if that date is not suitable to counsel my Associate should be contacted as soon as possible to arrange a substitute date. My unavailability for the rest of this year is the reason why I have referred the implementation of the decree to a Master. However, if the parties consider it more appropriate, I may be available in 1997 to deal with further aspects of this case myself.